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August 6, 2014

How Business Relies On Smart Systems

See how the Internet of Everything era is helping companies improve quality, increase workforce collaboration and achieve new levels of customer interaction and influence

Image courtesy of (Stuart Miles) /

In our current hyper-connected economy, digital technologies are improving every aspect of business through the use of smart systems in the production and distribution for all manner of physical goods. The technologies that enable these new processes incorporate cloud services, sensors, Machine-to-Machine (M2M) communication and the Internet of Everything (IoE).

As this automated, machine-connected world evolves, increasing numbers of companies are also relying on smart systems to improve performance, enhance customer insight and increase their competitive edge. In M2M-based environments, sensor-embedded objects in every vertical, from home thermostats to remote heavy industry machinery, can analyze real-time situations, make predictive or adaptive decisions based on the gathered data and then autonomously perform “smart” actions.

In terms of manufacturing and the retail industry, M2M technology is providing the ability to track products in ways that were not previously possible. For example, in the garment industry, uniquely identifiable chips, labeled “smart tags” can help retailers track inventory and, ultimately, connect items to shoppers who purchase them, providing even further insight into customer behavior.

The tags are the product of research and development at the now defunct Auto-ID Center, a decade-old collaboration between business and academia. The initiative was established to track the global movement of goods using an Internet-like infrastructure, considered to be an early forerunner to the Internet of Everything (IoE). As a result, the center developed radio frequency identification (RFID) tags containing Electronic Product Codes.

Today, large retailers such as Wal-Mart, J.C. Penney and American Apparel, have added the latest iteration of RFID technology to removable labels and packaging instead of embedding them into clothes. However, while the tags may be used to track items back to a manufacturer, they can also function in the opposite direction: toward tracking consumer purchasing.

For example, one concern is that retailers could scan RFID-based licenses, a growing trend, and combine the information with credit card purchases to gain entirely new levels of insight into shopper behavior. However, smart system-based tools such as these also offer businesses a more benign and helpful means to win customer loyalty and extend services.

A number of SaaS-based platforms provide business systems for managing fairly complex buyer-incentive programs in real time. These systems include customer loyalty and analytics tools that incorporate RFID technology, social media broadcasting capabilities and customer behavior analysis.

There are smart systems for in-store and factory shelving, customer tracking and monitoring brand activity, (i.e., harvesting social media mentions). In addition, a diverse range of analytics tools measure customer experience and shopping behavior at the store level. One approach incorporates a mini-survey application to briefly query shoppers on their purchasing experience and opinions. The fact that the surveys are so short has yielded high response rates.

Businesses then compile the data, which covers everything from the length of time for shopping visits to how far customers traveled to get to a store, thus gaining valuable insight into purchasing behaviors. These customer analytics tools directly address the desire to reduce costs, increase customer lifetime value and turn loyal customers into effective brand advocates. As more and more companies use these smart systems and tools to improve their Loyalty & Retention efforts, they’re also finding that adoption offers a compelling advantage: They can assimilate, assemble and analyze increasingly rich data to respond to customers in real time.

But smart systems aren’t just found in large-scale or enterprise business environments. Today, even SMBs or individual entrepreneurs can have a global reach and influence, expanding well beyond a capacity that was considered unreachable a few short years ago thanks to smart systems available on the Internet. In fact, increasing numbers of individuals work remotely via online platforms.

According to a recent McKinsey Global Initiative (MGI) report, we’ve entered a perfect storm in terms of digital trends. That is, a number of major IT developments are converging, interacting with and amplifying each other. These include mobile devices, cloud computing, social media, big data and analytics—all of which are integral to the Internet of Everything. Such technologies are also responsible for leveling the competitive playing field.

For example, these systems enable micro-financed entrepreneurs, SMBs and social innovators to exchange products, services and ideas easily across borders. The increased interconnectivity via these smart systems, mobility and the IoE has significant implications for how business in the 21st century will continue to evolve.

Awareness, collaboration and intelligence are key aspects enabled by these new technologies. An expanding IoE including wearable devices, smart systems and new communications media will increase the flow for the cross-border exchange of goods, ideas and services, and enable new modes of business to flourish.

It’s where the integration of intelligent device (sensor) networking and mobile-enhanced collaboration, for example, will create what some have termed a “digital nervous system” that’s ever-evolving and responsive.  The possibility exists to make massive levels of collaboration, currently found in areas such as open source projects, app development and ventures like Wikipedia, almost commonplace.

In fact, a recent IDC report analyzes the value of automating network operations to enable this digital nervous system. Moreover, IT is rapidly shifting to what IDC has termed the “third platform” of computing, comprised of social, mobile, cloud and big data. The reliance of smart systems on embedded sensor technology and the IoE along with the third platform will result in greater network complexity.

In the meantime, existing network processes are enabling businesses to employ smart systems and key analytics tools. However, one question persists: As the third platform and network automation evolves, will legacy-based companies have the capacity for a radical pivot to embrace the change?


Kerry Doyle has covered business and technology issues for over a decade, first as a technician at the fabled PCWeek Labs and a reporter for PCWeek magazine, then as senior editor at He has contributed content to organizations as diverse as IDG/ComputerWorld, Monitor Group, Harvard Business School, and Global Knowledge. As a freelance journalist, he provides cogent analyses of the newest trends in technology, from nanotech to the cloud, with a focus on issues relevant to both enterprise leaders and SMB owners. Used with the permission of